and i believe money in the hands of entrepreneurs, invests, is better than having the money in the hands of the government. the closer you are to where the decisions are made benefit attention. >> "squawk on the street" begins right now. >> 8888 is great. you can hold it this way, you can hold it that way, it's still eight, eight, eight is great. >> good morning, welcome to "squawk on the street," i'm melissa lee from the new york stock exchange. let's take a look at how we're setting off on u.s. futures. certainly got a lot of data when it comes to economic data. durables talking of 9.9%. we are seeing a higher open across the board for the s&p, the dow and the nasdaq. taking a look at europe, italy

is down by just .10%. a road map develops for what could be a very, very good day in technology. hear what steve ballmer has to say. the mini ipad is out. more trouble at best buy, a major management shakedown. and is cramer going to call this the come back story of the quarter? and could it keep the ceo off the hot seat? we begin today of course with microsoft officially unv l unveiling it's -- the secret staging area microsoft uses to lae out it's retail stores nationwide, we talked to steve ballmer about pcs versus

tablets. >> you asked me what's going to happen to the pc market and the tablet market. we can't tell them apart. but with one arrow, we have if you will gotten two birds, tablet and pc, but we don't want to let any of the innovation surface of that not be exploited. that's the only statement we're making. >> what do you think it's going to do? because if there's so much hoopla about windows 8 a year ago. >> it's a dividend play, it's a utility, it's a little more spark. the company itself, the ones i deal with are more fired up about it. last quarter wasn't a great quarter, it wasn't a bad quarter. microsoft is trying hard not to compete with its own customers here. i like the product, that does not usually matter with microsoft, in this iteration.

you don't buy the stock off of it and you got to see whether it sells well. it microsoft and that no longer means it's going to sell. >> i can always tell with you because we ask you a question and your voice sometimes get a little more fired. >> i want so much for microsoft to be the old microsoft, i want intel to be the old intel. i want cisco to be the old intel. >> if you go back to 2011, steve jobs on his death bed talks about how we didn't get to dominate in pcs because we had a closed architecture and microsoft dominated and in what, 18 months, everything changed. now windows playing catch up. it's obviously a cold company, people don't talk about wanting a microsoft product. this is technologically a very exciting product. i have used it and liked it.

>> for months. >> and liked it. but it hasn't translated, if people looked at it, if they advertised on facebook and people took a look at it i think people would like it and be impressed by it but that ma be too much of a leap. >> the enterprise layer is stickier, because people are going to want to use outlook because that's what we all use, this is going to, over time, as companies get used to more tablets, not so much click house mouse is going to change. >> one of the great stories out there is information technology under complete fire because all they do is order dell and hewlett packard. dell, dell, dell. we all look at the information technology people and they say, listen, it's more secure, it's not more secure. they say listen, it's inventive, it's not more inventive. they are going to lose their

jobs if they don't go to apple soon. most of the ceos are too old. they don't know what younger people want. they stick with dell, they stick with hewlett packard. >> it's a generational change. it's like i remember when when i was at goldman-sachs and ibm selective typewriters, they say we're going to stick with ibm, the select trick is a real good product. look at this little thing here, you have a c and -- no, the information technology, listen to me, information technology people, we're not going to use this as cover, you're going to keep us trapped in this box, and our kids are not going to want to work for you, they're going to go where they use apple. >> there are kids who have never heard of a selectric anymore. >> no more whiteout.

>> in terms of the change of sentiment of microsoft and windows 8. now we're not hearing that, we're not hearing that buzz from hewlett packard, we're not hearing from dell. overnight boasting earnings, grim outlook for the -- surface tablet, they're saying that retailers are reluctant to take on inventory from companies like acor, because the company is putting windows 8 into their computers. >> when you go over these tech earnings, it's either because of nokia exploring anyone who's in wintel, that's the old windows, microsoft. listen, guys, it's not really apple, it's not exciting. one thing microsoft has going for it that one stock is so horrible. they have said i will buy only

intel. but when we think about a secular shift, we think before rows, we think ncr, we think control data, the whole time they were do that, data general were sneaking in on the other side. theyed a the mike crowe -- they had the micro, they had the intel. microso mic microsoft surfaced with a usable product. >> we used to have a lot of worses. >> to quote a kennedy. we had a lot of bayonets and horses. >> apple is set to report on the bed tonight. company to earn $8.91 a share. but the watch is on about what apple will say about ipad and iphone sales, we're thinking they will discuss supply c

constraints on the five and whether tim cook really did suggest that ipads are behind when they announced the middle of this week. >> john ford offered more insight about apple than any analyst i heard. and what john ford said, our on guy, said don't be so literal. the 100 million ipads. apple's come down a lot. i have always said invest in apple, it's been way too traded. everyone has traded it. this is a difficult quart because we don't know how much they really sold. we know verizon sold a lot. we snow sprint sold a lot. >> a couple of quarters ago, we thought you could put a template over apple through the telecoms and it didn't work. >> but i do like the fact that the stocks come down, when you put soldiers on the beach and you don't soften it up first, they get slaughtered. this is the most softened up stock i have seen.

it's been a long time that apple has been cratered in the head. >> do you think it happened for a reason? estimates have come up, but will apple beat the $8.82. > -- future forecasts for the fourth quarter. >> apple and amazon report numbers that have nothing to do with the numbers we're looking for. because they don't play the game. apple doesn't play the game. these guys -- when i say play the game, there's guy who is look at this, you'll see these numbers who say oh, beat by a penny, that's playing the game. apple is in its own world. they're going to record a number, it is very hard to reconcile their number to what the analysts are looking for, this is not proctor and gamble people, this is not coal gate. what they will tell you is it's going to be a great christmas. and people are going to say, i can't leave it when december 11th is the 10th or these days

of u.p.s. say are great days. it's a powerful story that we keep waiting for the other shoe to drop because steve jobs is not alive. there were note -- i'm interviewing for a bucknell fund-raiser start. all i want to ask them s what other products were really, they have that car that ran on water? did he create that? i would love to hear that there was iphone 7 because that sustains momentum in a low multiple stock. >> each generation of iphone, is just less evolutionary, or revolutionary, i should say a better word even. because iphone 5, was not such a huge difference, it was designed different. slight, slight tweaks. but when it gets to iphone 7, do

you see the bang to the stock? >> kwrksz e3, right. >> i used to do a lot of work with intel and microsoft. and what they would tell me is the innovation would come from smaller and smaller form factors, but now they have chips on a chip. if arm holdings can develop a chip on a chip, so that we have 48-hour battery life. if there is some chip that makes it so that that little form factor is somehow able to create a keyboard that we never thought so older guys like us are not constantly typing things which says minnesota is going to win and it turns out something like eagles are going to win. we're going to love it. it has to do with tinnards.

. >> two of best buy's execs are leaving best buy. i don't know. how quickly does the headlines read duck chairs. >> i think when they fire everyone, it's going to be a big quarter, not. i think this is an outloaded company, it's very easy to be in a secular decline. whether it be radio shack, the old lafayette, circuit city. i remember when sharp was running circuit city. when i shop at best buy now, it is absolutely true, you call them, you deal with them and you just say wow, i would rather have amazon deliver the product to my house. >> there's also linens and things, bed, bath and beyond is now the best retailer.

how does bby in everything that's kmod advertised. i wonder if there's room for any kind of return. >> bed bath, the stock was down hideously. it's taking out the millennium day. i have a bed bath that's very close to me. it's the first one, they're a jersey company, and i keep trying to price what amazon has, this is an impulse place, it does a lot of couponing. jc penny moves away from coup couponing. i do think that best buy in the end makes easily checkable products. what is that samsung? what number did you have on that tv? and then i go to amazon, i go to best buy. i price compare. i had the misfortune of trying

to buy 60 inch best buy tv. i not that long ago, i wanted to do it on the phone. the card says jim cramer. why would i try to scam myself. am i trying to scam myself by sending a tv to my dad. well, prove, prove, prove that he's your dad. amazon doesn't care if he's my dad. >> joey's in customer service. >> eventually i had to go there and they said, oh, he's your dad. he's not even here, how do you know? proctor and gamble narrowed it's focus on -- chief financial officer was asked if the company's quarterly results silence critics of ceo bob mcdonald. >> china on the quarter organic sales, up 7, russia up 8, brazil

up 28 and we're starting to see a turn around in our core developed markets as well. so there's a lot of good news. >> he delivers. he delivers. >> it was one good quarter. >> he delivered mcdonald, army ranger, who had been a softy when he came in. was unwilling to make the changes. it looked like that laughy did give him the company he wanted. but i will say when you have a bottom line where you have quarter earnings per sharks i'm reading from the trademark, much stronger than expected. they had seen it to yuunilever d colgate. unlike one other company that's ever been able to -- the facebook advertising works, mcdonald delivered bob macken ernie.

>> 6%'s a lot. kimberly clark yesterday saying that're going to pull out of the diaper business in western and central europe. those are companies losses or pains? >> kimberly is, kimberly blanked. i never thought kimberly blinked. i remember when they were a little midwestern company who decided to go national. they really figured it out. this was a remarkable quarter for proctor because they said, listen, don't even try to compete against us in business. pope was down a lot. but i think that this was a quarter and it's going to say, if i were at colgate, i would say darn it. if we were at bow sew, we're wrong. i thought this was going to be the quarter we delivered. >> is he on acman's -- >> i got guys who, ackman, it's

like the xancompany xanax thing the: pin. >> those who have trouble sleeping, he lets us know, guess what we got a new nyquil product. nyquil zzz. that guy paulman came from proctor. those who bet against proctor are betting against the renaissance. >> you talked about the tale of the week. >> it's not to come in and be green just because bernanke may or may not have a job. >> when we come back, betting the farmville, we'll go into zynga's new plans. plus out of all of today's executions for disappointing

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i've been away for about a week or so, in that time zynga is back. even though zynga still stinks. >> it sunds like a real company, which is no longer frat house. it did have a backbone to it. this poker initiative. people really love online gaming. it's based in the uk. i can't play it in the u.s. but just trying to figure out whether that will be a subject, this company has a pulse because they have a lot of buy back, they have a lot of cash.

they have a lot of firepower beyond that, the recognition that the games have not been exciting was terrific. we needed to have them fall on their sword. they fell on their bayonet got trampled by the horse. >> you would not equate their recovery to what facebook announced the night before? >> zuckerberg, that was a great quarter. i want to say why it was a great quarter. because a lot of people were saying on jim cramer how could they reverse like that. they switched their operating system, they're now going toward apple and now going toward android. zynga is a hit business. you got to keep coming up with hits. if poker is a hit, the stock can go through $34. >> cramer told you how to choose companies sitting above the fray in this moment. later on, meet the top executives behind a website looking to capitalize on a $30 billion a year industry.

stick around to find out which business we're talking about. andlet take a look once more at features, look at the dow, looking at about 85 at the moment, much more "squawk on the street"s straight ahead.

here with cramer's mad dash. >> cloud infrastructure, wow.

sagan's back. >> yesterday you said tech had been the disgrace of the quarter. has that changed for good so far? >> tech's still bad. it's just that the stocks got oversold. >> winn. >> steve wynn. he's dictating tax policy. he says the taxes are low for dividends, he made the case to keep them low. i don't know if people had fixed the debt want to keep dividend taxes low. they got to fix the debt. >> not that many. i mean he thinks he's got a lot of irons in the fire, ant don't forget, china's been strong. when i say strong, it's a relative game. how about modest week, wynn has been in the range. >> when we come back, as you might know, after a facebook surge, zynga having it's own little rally.

dunkin'. stocks up sharplily this year. also a taste of tech, we'll talk to the ceo of adobe. a lot of trading action when we come right back. >> is the main stream media >> is the main stream media really intent on

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the openi ing bell is ringi on wall street. we'll be speaking to former senator judd gregg and the advisor to the president. we'll be speaking to the voechlt in just over an hour's time. nice counts here after a few sessions of losses. >> u.s. earnings. we're finding something to talk about. proctor, major company, we saw conoco reported a decent quarter. the tech numbers weren't as horrible has we have been getting used to. it's nice to have something to talk about. >> one trend i'm noticing after kimberly clark, now ford

companies really paring, their exposure to europe. >> uk actually had decent gdp. it wasn't the olympics, you need to know. >> closing reportedly some facilities in southampton. not long island, southampton, england. >> 30% of capacity. >> people have been after him to do this. people have always been thinking europe will come back, give it some time, europe's not coming back, they have no growth initiatives whatsoever. alcoa had to go with an italian plant and a spanish plant. there's no significant room in those nations to grow. >> better than even the seg lar reteal trends? >> this is the renaissance, this is the moment for autos, this is quite simply a boom, an

unexplained boom when you look at the -- uncomplainable given the boom. but a boom in autos. >> and a boom in housing. we got numbers from pulte, higher rental rates and record low interest rates. he's saying new strength in housing could accelerate the pates of the economic recovery. >> i'm surprised at the price point that's selling, too. >> the higher price points, and it looks like the inventory worked off to some degree at banks. they can't seem to put the past behind them. but look, housing and autos can trumpb even government shrink and industrial shrink, norfolk southern was very disciplined, but it was coal related. this auto economy which is what it used to be when we were in

autos. even the durable goods, you know, look at aerospace, autos, housing are major expecomponent the under the circumstances economy. unfortunately in europe, they're major too and they're bad. >> banks across the board very strong. so far in the session along with home builders, energy stocks doing well. and microsoft up 1% ahead of windows 8. >> possible markup end of month. how much is joy, how much is good earnings, how much is the recognition it oversold? >> good questions there. >> morgan stanley by the way, up 2%. a gain there, outlier. >> the cog in j.p. morgan, remarkable banker. i do think that jp morgan has taken that quarter and hasn't

looked back. >> dunkin' doughnuts, coffee has been weak, weak, weak. all the fast food, except for quick and quality. if we can get a rally in retail, a rally in restaurant, a rally in auto, we have something to build on. >> that can offset declines? -- >> tech, tech, tech. >> tech and energy? >> energy, what a glut. you need more capacity to take out in energy, we need more mergers. >> finally honey well, we were talking to dave cody who rang the bell this morning. bernstein had left their turn around phase. >> their autos, they're aerospace. one of the things that people forget. see all these articles that are -- they have the chemicals that make dirty oil into cleaner fuel. the so-called crackers, i'm not speaking saltines.

i'm talking about the companies that take -- dave cody has been one of the most forward looking ceos. and he is my neighbor, so full disclosure. >> you didn't mow your lawn. >> but we did have a problem with trees. >> that's another hedge fight. >> locust trees. some strange name. they had to come in here and do some jobbing. and then he pointed out one of my trees had a problem. i trumped him with two trees. let's put think it way, good fences maybe good neighbors. >> bob on the floor with more. >> we have so many important executives this morning. the most busy part of the day, trying to talk to some of the these executives about how to solve the debt problem. paul stephenson is here. what's the main message here today? >> that we have to come together

as a country and be united around the single most important national security issue that we face. and business knows that if we don't face it together the economic -- our ability to generate jobs, our ability to invest and boles simpson has given us a frame work around which we can rally. >> do you think the country understands simpson bowles? do that anybody can understand debt prediction and some kind of tax increase isn't the only way out of this. >> they have catalyzed a lot of interest around this. the only responsible way out, you can't only tax your way out. you can't only cut your way out. to come together and do it across the whole spectrum. >> a lot of people, traders, all gather around these executives today. paul, thanks very much. >> let's move on to china here, did you notice, we talked about

it yesterday? hang seng is off best day in a row now. china investment definitely back on the radar of investsoinvests. earnings have been in line, but the earns are in like. six of the eight companies that reported, missed on revenue, q-3 revenues, only up 1.3%. earnings are only in line with flat expectations. we were expecting better earnings growth, 1.3%, that's the story and a bit of a disappointment. home stories, i like what i'm seeing from ryeland, ryeland ordered growth, 66%. that's a spectacular number, ro rev knews up 40%. lower incentives mean they a -- pulte ordered 47%. maybe a little bit below some

expectations, but average selling prices, up 6.5% year over year. total orders well below over the highs of a few years ago, but we're definitely on the improvement track. >> we have a penny home sales. there are very, very few new homes on the market and they're just meeting the demand. and again, these are feel-good stories, if you looked at whirlpool, whirlpool told you great things. fortune, the furniture -- the cabinet, sing, doing very well. sherwin williams down today, i bet that stock reverses very quickly. shw, i'm a buyer. >> all right, let's shift to bonds and the dollar. go ahead, take it, rick. >> thanks, jim, well, of course there's a lot of data going in many different direction direct durable goods were better. it doesn't change the motion that we're going to be under

tomorrow's first look at third quarter gdp, but maybe more importantly, lots of layoffs being announcement. but not all reserved. but one things we do know is interest rates are moving a bit higher. look at the 24 chart of tens, up about half a dozen basis points. if you open the chart up to may 1, notice we still haven't taken out the september high yields. but look at the five-year. going back to that same time, may 1, they did break out of their pattern, they are now at the highest yield since may 1. now granted, we have a new guy-old guy issue, because we auctioned 5s yesterday, and it wasn't a spectacular auction, but it paints a picture, it's not only about the long aped and steepening, they call it the epicenter of the funding market and that's true. we all know the uk had their fair shares of ice cream double dips on the recession. but it seems like the olympics

really helped them out. their positive data translated into a positively big move for the pound as you can see on this 24-hour chart. >> rick santelli, what's the latest? >> ford ceos outlining the moves that they had this morning in europe. essentially it comes down to this, three things, they're making another plant closing in europe. they're taking out two of their six final assembly plants in europe. that's about 18% of their capacity. at the same time they are expecting wider losses in europe. it's supposed to be a billion dollars worth of losses. now ford says they will be using at least $4.4 billion. there's also the news that ford says with a strong finish to the

quarter, they now expect third quarter earnings which will be coming up next tuesday to be at least where they were in the second quarter, that's an improvement of guidance being raised, they'll be making at least 30 cents per share. we get numbers next tuesday. these are significant steps that ford is taking in europe, doubting 13% of its workforce there and by the way, their outlook for europe, they don't expect sales to improve by this year or next year, they think it's going to take some time. >> thanks a lot. phil. fresh from the opening bell, first on c 234rks bc, joined by two great friends of the network, joe greg and steven ratner, it's like the oscars for business executives. who are you wearing today is the big question? here's the front of the journal, ceos call for deficit action and senator, you're wading somewhat into the thicket of taxes which

not everybody has done. what's the take? >> the take is there a genuine movement among ceos and people who are concerned about our future to get our debt under control and it requires a comprehensive settlement by definition means you got to look at both sides of the ledger. if you take simpson bowles came out of deficit and spending reduction, 35% came out of a tax reform regimen. you got to get the debt downer or we can't get our guarantee of prosperity. you're looking at very significant retardation of our economy. >> some of the reaction is there's no specific policy instruction gsz on this, it's kind of like you guy goes fix it. you don't give in to the top 2% of income earners. how you. >> we want to just be not only

bipartisan but nonpartisan, secondly we have very clear principles as to what a deficit reduction package needs to look like and as time goes on, i think you will see it come out with more specific ideas as who how this could actually be imp mptded. but this is going to be a big notion and we're just trying to guide it and push it in the right direction and have it be bick, have it be real and have it be all the things that joe was just describing. >> if so, we have already gone through that. >> well, you know the way our government works, it's not linear, it moves worth and works its way to an agreement. and simpson bowles was part of the process of getting to an agreement. and conk is going to have to come up with it's own plan. but clearly, you're going to have to have an agreement that gets around $4 trillion worth of debt reduction in the next 10 years with the majority coming

from entitlement reform and 10% of it coming from revenues. that's going to have to be done by congress but we're going the give them some ideas and hopefully it will be useful. >> we're not going to have a big deal in the lame duck, which may get a place holder. but this will be the biggest most complicate tax and budget package every done and it will take well into next year to do. we're here to give congress courage. we're here to say that if you do the right thing, there are all these ceos, all these companies who are important in their world, we're going to be behind it. that's really, i think a lot of the value we can add to this proposition. >> it's great to see you here today, a stage manager, something afterwards? >> senator judd gregg. thank you very much. the ipad spilldown spills into the bottom line. as we head to break, take a look

at this morning's early movers on this early session on wall street.

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and take a look at the dow heat map. much in the green this morning. but we do have a few components in the red, some of the biggest gains here, proctor and gamble, no surprise there, and ibm leading on the tech front is higher by 6%. so this is a major mover here on the doubt. it is notable that technology has weakened. we had apple higher open at the head of its earnings tonight. higher by about .07%. and we also see microsoft gains paired so far in the session. >> there's just too many areas of tech where when we go through the quarters, we say why are we buying it? there's a lot of companies that are bouncing. a lot of the component companies have been just so disastrous, it's still treacherous.

>> someone has pointed out, the building blocks companies, the prax airs, somebody mentionings timkin this morning. things that make other stuff, bigger stuff, not especially encouraging. >> timkin will say this, as i visited last week at one of their foundrieies near canton, ohio. you need to bring down expectations to the point where people don't freak out, but tech has not been able to the that, because as low as the expectations are, they're still not low enough. >> interestingly, the president sat with jay leno to talk about one of the perks of being president of the united states. >> i'm revealing a secret that this has not been made public. a friend of mine came in to visit me, drove into the south lawn, had a chevy volt which is a wonderful car and he said, why don't you take it out for a

spin. so we didn't tell the secret service and -- now i don't mean going out the gate, i just meant around --. >> this is this morning's "squawk on the street." what other products do you think the president has secretly tested. tweet us, and we'll get your response later this morning. i'm almost afraid to launch this on the american public. >> do you think a device like a cream, like a beauty product. >> it could be zzz quill, because proctor the rolling. a service, a reverse mortgage, it could be all kinds of things. >> a reverse mortgage. >> i heard a lot about reverse mortgages. >> i got offered one online yesterday out of the blue. >> well, great. the next big blow up. >> we have heard a lot of excuses about results this quarter, this earnings season, one company takes the gold medal for that. but first.

>> up next, they say an elephant never forgets. >> and that's all well and good. but can an elephant play six stocks in 60 seconds? doubtful. but jim cramer can and he will, when "squawk on the street" returns. nd listening to your instinct duff & phelps finds the sweet spot that powers sound decisions. duff & phelps financial advisory and investment banking services.

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get a look at what's coming up at 10:00 a.m. >> obviously we're waiting for amazon and apple to report. look at the tablet walls, as of course microsoft unveils the surface. we're going to ask you why zynga $200 million to its shareholders while they're on life support. >> see you in a few minutes. six stocks in 60 seconds. >> start with family dollar. >> i think one this one's going to turn up.

>> sky works solutions. >> everyone, this is raymond james today, this is a component company, a good company. >> we just saw f-5 at the top of the losers list. >> they say this is enterprise this is gate keeper for the internet. >> windham worldwide, downgrade ". >> i am shocked that this company is downgraded. it's a huge winner. but they didn't blow away the numbers. >> it's working buy it. >> and lsi corp, disappointing? >> this is an example of a really horrible quarter, but i already expected a horrible quarter. so when he did it, people like it. anti-dupont. >> exactly. exactly. >> what's tonight? >> for a remarkable successful quarter. big dividend and lsi will see what it's like to see an

outbreak quarter and still be loved. until this election it's just going to be catch and catch can. you've got a proctor that will stand out, and a dupont that will stand out. but everything else is just trading forward. >> anything else about this cycle in blr? >> the fiscal cliff, that tends to be an alibi. look what ford had to do. europe is so horrible. we should be talking about it every day, they don't talk about it in the debate. europe is the reason for massive softness, even in our country even in china and they would do anything to help. >> in the last couple of days, where the data appears to show some stabilization in china. but today we get this blow out, blowout. but people want to have the olympics as a special runoff. >> it does seem run off. our country's doing rather remarkably, carl, the employment claims are good, but europe has

to turn. too many of our companies decideded to take over europe. now they're getting crushed. >> so as -- if it's tough being a trader 12 days before election, do you stand pat. >> yes. the yield goes to 4, you get interested, if the stock gets hammered, but the fundamentals were good you get interested. but we're just not going to see the push we want to see. >> we'll sigh you tonight at 6:00 and 11:00. and home sales, after a short break, do not go away. [ horn honks ]

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the real estate market the bouncing around a near range. so not the big surge that we were expecting. regionally speaking, pending

home sales index up 1.4%. remember in the midwest is where we saw big drops in new home sales and that report yesterday. in the south pending hole sales up in the west. up 1.3%. but the west was the only region that saw barely any gains year over year in this pending home sales index, that is due to low supply on distressed homes. s. 45ed to the holiday shopping season. who's going to come out on top.

>> and another dose of bad news from best buy. the retail shaking up it's management one by one. >> zynga flying high after posting stronger than expected revenue. >> and happy 30th anniversary adobe, the company's ceo talking about in the clouds. we got to get back to the nonstop tablet battle, amazon and apple out with earnings today. both of them, microsoft and google vying for your attention request both of their tablets. >> we talked to steve ballmer this morning about the surface. >> you can go through the products from all those guys, they have strengths and weaknesses, but not apple, not google, not amazon, nobody has a product that you can use that lets you work and play that you can be your tablet and your pc. >> who will win over your money? dennis furman is market analyst,

your -- you tweeted this, you'll get half the performance about the ipad mini, you'll get half the performance for twice the price? >> it's value is frankly is begin initiated size so you can hold it in one hand. people have been talking about that for a few days. but overall tablet in the tablet wars, i have a bit of a different view, this christmas, basically they're all going to be winners. by 2015, that's expected to be 50%. this christmas, sort of culturally, all the talk about it will push more tablets into more hands, so i actually think they all relatively win. >> i don't like that. everybody can't be a winner, in the stock market, there is always a winner, out of them

all. not everybody is a winner, give me a win. >> i would say for the stock t question is, the ipad minifor the apple stock, is it really a cannibalization stock for apple. you have're going to buy an ipad, or an iphone touch, do you need an ipad mini? and similarly are you going to want to continue buying up products when they're really just changing the sizes. you basically have an iphone, an ipad, and a lap top. is 2 ipad really going to cannibalize sales from those other products? >> on the east coast, he's already got six apple products unlike the rest of the world. but he's looking to buy dennis further down the line. do you think it was a mistake on the ipad mini to price it at $329 when the display is not as good as others? i mean do you think that's a fundamental error? >> that's what i was mentioning.

basically you get 50% of the performance for 65% of the price. why not buy an ipad or an iphone touch. they're going to sell plenty of ipad minis. have they shrunk the product opportunities to such a small segment that they just begin cannibalizing themselves. the real option is a television or a cable television product. we're just not seeing it out of apple yet. right now ipad miniwill do fine. >> have you got your hands on a surface yet a microsoft surface? >> have not seen one. >> apparently they're beautiful. apparently they're very, very beautiful. what's your feedback on the cover that you can type on that ballmer was again strademonstra. >> as ballmer just mentioned, he's really aiming at a work audience, the ipad is fine to work on, but certainly not

perfect. we're seeing right now because of the blackberry, no one ever talks about the blackberry anymore, products and services, for the people who watch cnbc, they've just not being made in the way a lot of consumers want, so microsoft has a good angle there. the questions is, and you have seen all the reviews, sadly the software is not up to snuff. but i think it's encouraging that microsoft is in the game in an incredible way. >> apple is good at creating categories, but they leave some space in their wake for the -- it's like those fish that swim longside blue whales? >> i think that's a pretty fair analogies. penetration in this country is still pretty small. there are going to be more americans and you guys aren't happy that there might be more winners. there's going to be more tablets under more christmas trees this season than at any time ever before. the category is growing, there's room for all kinds of winners, but i think apple, the expectations that the market has for it perhaps are not sustained

enough by the ipad mini itself. the next question is what's the next big product. i don't know what you guys think. i'm going for tv, if you guys have any points of view, i would love to hear it too. >> it's not lost on many, dennis, that they stream this launch on apple tv. talk about getting people's appetites wet. >> perhaps the more popular products out of that launch could be the lap top and the imac itself which are pretty impressive products unto themselves. we have not talked about at all, dell, hp. >> there's a reason, right? >> the market caps of those companies are in a rather shocking downfall right now, and so i think 2013, for the enterprise providers it's a much more existential session. >> apple has never been

competitive on price when it comes to just simply products, right? i mean the ipads are a at people mum for all other products on the market. by keeping that price point above other competitors out there that's actually keeping that price discipline to maintain the margins. as long as it makes it up on the volume side of things, it could actually work out just like cannibalization. >> simon raises a great point, us media types on the east coast. we might have access to u all of these devices. are you -- do you want to buy an ipad mini, over an ipad touch or over an ipad itself. it seems like you have a number of choices in the apple product line. but you're probably only going choose one in that first go and the ipad mini is a perfectly fine option but it's certainly not the price you're going to get for an ipad itself.

>> with this comment that everybody's a winner, if all else fails, you could become a schoolteacher. >> everybody gets a gold medal these days, everything gets a trophy these days. >> there is such a thing called seg lar growth. nooks and i patds are all -- it's a good moment in america. >> always good to get your view zblft thanks, guys, i appreciate it. >> quite the earnings seasons this quarter, and our own herb greenberg is looking at the excuses people are using. >> we have one at least the winner of what i think is basically the kitchen sink award. in fact they have won this hands downing, it's martin zarrell at wpp. this advertising communications company cut its outlook and

blamed everything and i mean everything, everything, zarrell cited four, quote, gray swans, the euro zone, the middle east, the concerns about a hard or soft landing for china. finally the fears about the american economy, the deficit and u.s. indebtedment. further cloud on the horizon may be, 20, 13, that's right the entire year. no big mini or max si events happening the whole year. the european soccer championships and the is summer olympics in washington did not spark the spending as expected. speaking of the olympics. remember crocs the shoe company? it reported a bad quarter.

turns out the olympics had a huge negative impact on that company's european sales. >> you see these very high viewing figures for the debates that people are not out in the restaurants. >> well if somebody loses in the restaurant, somebody's going to make it up on the take some other way. >> it's a serious point, the other point is that a lot of businesses don't know quite what their strategy is, so they're not sending their strategies out like they usually would. you know what they call this phenomenon? >> what, simon? >> they call it electile dysfunction. >> wow. who's they, by the way? >> that comes from the principal of one of the big four. that's how he terms it. i better not mention the term on

air. that's what they call it. ele electile disfunction. >> that's going to mike detail this moment. >> they could come up with a viagra for that. >> they call it november 6, november 6 is the viagra left out. zynga, the stocks still down. is it too 4rir8, too late for znga? >> and narayen rang the bell over at nasdaq. all that and more on "squawk on the street." americans believe they should be in charge of their own future. how they'll live tomorrow. for more than 116 years, ameriprise financial has worked for their clients' futures. helping millions of americans retire on their terms. when they want. where they want. doing what they want.

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another shake-up. u.s. business held by michael vitelli. shares of the company getting hid a little bit. morning star's global director of consumer research. r.j., welcome back. >> thanks for having me.

>> the longer term channels heading into the holiday suggest that even a seasoned turn around specialist faces an uphill battle in making this company more competitive over a longer horizon. can anyone do this? >> at this point, it's going to be tough to make the changes necessary to make this business viable over the future. >> they can heat on price invasive, but one of the topics that hasn't gathered much attention is that manufacturers like apple and samsung, they have gotten a lot less reliant on best buy. i think that's a bigger issue is how you overcome that when apple had its own stores online to

distribute products. that's the biggest thing that the company has to come up with a game plan for. >> who extends credit to best buy going into the holidays? is that going to be a big factor for the quarter? >> launching -- and actually to prepare for that interview, i came across a table which was really useful of all the features once again another against another. >> they might actually buy it

from best buy as well. >> you know, at the same time, they're complicating the matters that best buy comes out with their own cap. >> but continue to. >> best buy doesn't have it at this point. they talked about price matching this holiday season. but only in selected cases, but only in the discretion of the sales. >> and dramatically changed the look of this company, reduced square footage by quite a bit. just improve the customer service experience. >> where does it leave the

latest chapter regarding schultz, does it -- certainly if he's looking at it he's looking at this quarter. >> i don't think it changes the. private equity companies, if they're doing their due diligence. but at the same time, with deteriorati deteriorating -- for sure and say, hey, given all the-we may be willing to take it that the offer. >> your vault is 16, we'll see what the analyst day does not coming weeks. >> okay, we're climbing about 17 points on the dow, let's get a market flash back at hq. >> we're at angie's list. a website that allows you to give reviews for services. take a look.

>> 75% and paid memberships rose 68%. investors like the news and the stock is up 25%. >> financial information outlet. greg blat joins us in a first on cnbc. >> the ceo of dunkin', brants will join us online. let's hope he's brought some doughnuts. a crash management system and the world's only tridion safety cell which can withstand over three and a half tons. small in size. big on safety.

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that is almost exclusive on the back of these expectations for i don't know what number. >> short of the yen, i would stay short of this maybe october 30th. it has run quite a bit and i would be -- to wait a little bit. the u.s. treasury yield. an interesting driver of dollar, people focus on the rate differentials between u.s. and japan. that's up to 1.8%. we're near the high end of the range on ten-year-year-olds. after the election we get a little bit of chance, people pulling back on equity positions a bit. squaring things up. that should support, push down the yields. i think that could give you a

little bit of entry levels in trades. >> again, if you're already short yen, hang on to it into the meeting, if you're not, try to get that poll back if we can. if you see dollar-yen down to technical support around 50, i would feel better moving back to a trade at those levels. and a stock, just under 79, around 78-80. >> i have a question of a coral larry trade, we saw gold bounce back seven-weeks low. would you be -- would the extension of this trade be that you would not be inclined to be long gold into the october 30th meeting? >> i have been, i continue to be a believer that gold is a buy on dips. it's been a hard short-term trade, it's been very volatile this year, but looking a little bit longer term i believe from europe, i think there's a chance

you could get more from the united kingdom. the monetary printing pressing are alive and well and central banks are just diversifying and buying gold and i think those factors are going to keep some support under the metal. you want to buy it for a longer term position, short-term, i think you do have to be careful if the bank of japan next week disappoints and they only do a incremental step. that could lead so some selling of gold short-term, for those inclined to trade, that might be time to buy. >> the best news of the week is that melissa is back and she can market money in motion. great to see you. rebecca anderson there. and for more currency trades, be sure to catch money in motion currency trading tomorrow at 5:30 eastern. and if you want more education about currencies, do go to currency class. >> don't forget to tweet us.

>> i'm revealing a secret, this has not been made public. a friend of mine came to visit me. drove into the south lawn, had a chevy volt, which is a wonderful car. and he said, why don't you take it out for a spin? so we didn't sell the secret service. and -- now i don't mean going out the gate, i just meant around --. >> "squawk on the street," tweet us. >> meantime, breaking news on nat gas invanories, after the steep drop this week, will we see a further decline or see it go higher. but will the company's plans to lay off employees and shut down

old gains be enough to keep it a big winner? stay tuned. [ male announcer ] this is steve. he loves risk. but whether he's climbing everest, scuba diving the great barrier reef with sharks, or jumping into the market, he goes with people he trusts, which is why he trades with a company that doesn't nickel and dime him with hidden fees. so he can worry about other things, like what the market is doing and being ready, no matter what happens,

which isn't rocket science. it's just common sense, from td ameritrade.

i'm bertha coons, which got the government inventory number. last week, that's right on the money as far as the consensus. nat gas. coming a little bit off of the lows, but overall today, even as

we are seeing risk appetite increase and we'ring a little bit of the move up -- nat gas remains the rodney dangerfield. now that we're up around the overall storage capacity, up around 5% over the five-year average which is less than we actually are when it comes to food storage. >> about an hour into trading, some of the stories we're squawking about. 7:31 on the west coast. up almost 4% off multiyear highs on the consumer giants better than expected numbers. pending home sales up .3% in september. that's well below the forecast, of a 3 percent game. it's 341 in the past week according to freddie mac. >> zynga tops estimates sending shares soaring. this week the company gave the

boot to 500 of their staff. but are these changes enough to ensure zynga's survival in the tech wars. guys good to see you both. >> thank you. >> so ken, i'm going to start off with you, this is still not enough at all from moving underway to even just a neutral rating? >> i think at this point, we're just being a little bit more cautious, we do understand that the hard assets probably to get you to about where the stock currently trades, but we think the transition that they're going through in terms of having to roll off some of the legacy gains, plus all the changes that facebook is making, really leaves us feeling cautious right now, and we would like to see at least another quarter where they at least the don't negative liz revive their guides dance at this point. >> i'm harping at this point. this agreement would this actually position zynga

potentially for a biggest presence in online gambling. there's so many gaming companies out there forming partnerships, mgm, specifically with the win in order to get ready for this. this could actually be a huge new revenue stream for zynga. >> i don't think so actually, we looked at this in early september, we also studied wynn, we studied the holdings, we went state by state and ultimately what we came away with was the gamble opportunity was probably a lot smaller than we expect. we give them 15 to 20 crepts per share. it's very generous. be even as you look across internationally, there aren't a lot of countries where this is legal. and it's pretty much the only one. >> we already know they're cutting their staff.

they're going to sunset some 13 games. they're cutting investment in the ville. how is that positive in what cramer says today is a hit business. you have to create a hit every now and then in order to make your year. >> can they translate the old experience they have on the facebook platform to mobile. and thus far they are not proven that they k we're basically waiting can they make hit gains on the mobile platform. we're not ready to give them any credit that they're ready to do so going forward. >> can they give in to muscle then? mobile is a whole other problem, because then everyone's suffering, it's like the film business, you can suffer only so many losses. >> but it's -- i was going to say it's more done that, isn't it? because they're returning $200 million to shareholders. that smells off, doesn't it? >> i think that certainly helps us feel a little bit better about the cash position, because you can get to $2 per share in

cash new york city the fact that they're willing to return some of it is positive. but if you look at the transition. >> it's a. >> i think their people are going to wait and see if they can actually do it. if they can't, at some point down the road, could it be an asset that someone could pig up? we just don't have a lot of faith yet that they will be able to do it. >> ken, earlier in the year, one of the great things you could say about zynga was that they were closely married to zynga right before zynga went public. are they still okay? absent a closer tie to facebook,

even as they now start to make some progress on mobile? >> i think the mobile question is exactly the right one. as you look at the growth in their mobile revenues, they roughly tripled over the course of the last year, but when you look at facebook, they were able to triple in the time span of a quarter. so, yes, i think they are making some traction there, but not enough to offset the loss that they're feeling on facebook. >> all right, ben and ken, thanks for your time, we appreciate it. >> let's get a market flash with larry. >> we're taking a look at cruise ship oemplt fors, first royal caribbean profits actually declined because of weakness in europe but the results were better than expected and the company is raising its full year outlook. it's bookings for 2013 also have been very encouraging and as a result its stock is up just about 11%. also giving a look at it's rival cruise line. >> still to come. >> what do you sell?

>> 8s. >> 8s? like the number 8s? >> like the number 8? >> right. >> oh, that's kind of a weird thing to be selling. >> it looks like ballmer 2. will microsoft's sales pitch look any better? also ahead the ceo of adobe talks competition in the cloud, when we come back. at optionsxpress we're all about options trading. we create easy to use, powerful trading tools for all. look at these streaming charts! they're totally customizable and they let you visualize what might happen next. that's genius! strategies, chains, positions. we put 'em all on one screen! could we make placing a trade any easier? mmmm...could we? open an account today and get a free 13-month e ibd™ subscription when you call 1-888-280-0149 now. optionsxpress by charles schwab.

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it's a national save for retirement week and sharon epperson is here with more on

figuring how much you need whether you're 35 or 55. >> it's probably one of the most asked questions, and that is how much do i need for retirement? how much do i need? is it a million dollars? is it $45 million. what is the magic number, it's actually 8 times your final salary. fidelity investments came one this number and a strategy to get there so that the typical worker can afford to retire by his or her 67th birthday. you can mark the key milestones by knowing how much you need to have state offed by birthdays along the way. fidelity says by 35, you should have saved the amount of your current salary in retirement. by 45, have three times your salary saved. five times your salary by the time you're 55 and that should make it a little bit easier to get to eight times your salary by 67. is 8 really enough? because fidelly assumes you're

going to earn 5% on your investment. and the 401(k) service provider financial engines also points out that the more money you make, the more you're going to spend. the underlying goal of all of these benchmarks is still the same, and that's going to be to motivate you to save. and there's not going to be a steadfast rule of thumb, where you live, how you live, your health in retirement, all of that is going to impact the dollars that you're going to need. you may need to save more, you may need to work longer, you may need to delay taking social security. try to reach the benchmarks that can help ensure that you don't outlive your money in your late 70s, your 80s, or even longer.

we're going to have some strategies coming up in "power lunch" and on retirement on cnbc.com to help you out. >> fear is a great motivate for, because when you say 12.5 times your salary, one estimate, that seems like a lot. the question i have, 12.5% of your salary out of what year, each year you're saving, by time you're 35, you want to save that -- >> your final salary. your final salary may not be the highest salary you make during your career. so that is something to keep in mind, but based on your current salary at that time. and that's where they come up with the 12.5%. >> i can't believe anybody is sitting on eight times their salary. i appreciate these guys are trying to sell pensions. >> by retirement. by 65? >> really after what the housing market's been here. >> you're thinking about your peak earning years, well, i have 8, 12 times my salary.

by time you're 65, some 65-year-olds are already scaling back, they're trying to figure out what they're going to be doing during their next year. and they may be spending less. >> i'm sure that's where we should b but that it's a whole different order of magnitude to where most people are matching now. they have probably eating up some of their mumpb on their kids. so it's going to be very difficult to get to those numbers, that's why one of those things we're going to talk about when you're in retirement. where you're going to live and

how you're going to live, those are going to be really key components and it's really not going to be the way it is when you're 65. >> a lot of us start our careers eating rommen every night so go back to how you were living during clerj. >> sharngs thank you very much, we look forward to the other reports during the day. in the meantime, earnings, it's what's for breakfast. we'll sit down with the ceo of dunkin' brands, to find out what's brewing down the pipeline. and the next hour of sport. good morning. >> reporter: the stock market seems to keep reaching lofty levels even with this week's correction, we look at treasury prices, maybe they're not even at the highs, but we're still under 2%. how long can these markets hold these levels? i don't know, but we're going to be talking a lot about the

viagra, change at the top of the hour. i've been a superintendent for 30 some years at many different park service units across the united states. the only time i've ever had a break is when i was on maternity leave. i have retired from doing this one thing that i loved. now, i'm going to be able to have the time to explore something different. it's like another chapter.

we have really positioned ourselves as being the big data company for marketers and as hundreds of billion millions of companies move online, we're managing that content. >> we're talking now the sales forces in the oracles in the

world, how daunting is that? >> we're the leader in this category already and we have established ourselves, we process over trillion transactions with respect to analytics. our data platform grew over 100% year over year. and when you look at our business, we're the leader in the category. so we think the others are actually coming after adobe. but where we win is the fact that we have the dna. we've always served these markets really well. the creative industry is an industry that not only recognizes what adobe does but has tremendous partnership with us. >> everyone's talking about how the cloud is affecting corporate earnings so far this year. you've been moving into the subscription model where you don't necessarily need to buy photo shop. you can essentially rent it online, pay a monthly fee and access it through the cloud. how has that changed the rate of use, the rate of sales? >> we're really trying to

reimagine the rheeuacreative pr with our move to the creative cloud. we mentioned adoption so far has exceeded our expectations. the beauty of that is it enables us to attract a whole new set of customers. we can innovate at a far more rapid pace. for a customer they're always assured of having the best software accessible to them at any given time. we're off to a great start. >> and the cost of printing a dvd or a cd, packaging it, mailing it, the cost of that versus having to buy a server and run a server farm and manage that cloud, how do the costs compare? >> well, today really the software still runs on your desktop. so what people are doing as part of the service and membership, they download the software. but increasingly as we deliver services, we will be making sure that the benefits associated with the cloud outweigh the costs associated with the goods

that we have to deliver to customers. it's just a more natural way for customers to get the software. >> yeah. let me ask you some broader questions about sort of corporate i.t. demand. we keep hearing from various companies that demand is sticky. it's taking longer for companies to make decisions, especially as we work our way into the final quarter, the election, year end, fiscal cliff. does that fit with everything you're seeing. >> i think in the digital marketing space because there's still so much money that's being spent and people don't understand the metrics or the return of investment, we do see our customers increasingly looking to us to help them with the return of investment. we introduced a new provocative campaign yesterday. so i would say that marketing is going to be a new area of investment spend. especially digital marketing. i think we're well positioned. >> let me pick you up, sir, if i may on the advertising campaign you just mentioned. you seem like such a polite

gentleman. i was surprised to see you're using an abusive word in this campaign. is that because you believe in the way in which corporations communicate with the general public is about to change? you've clearly done it very deliberately. >> we really believe that we had to take leadership in the new emerging area of digital marketing. people need to understand that the next generation of marketing will leverage all the creative that they've had. but it needs to be influenced by data. we need to get the insights associated by data. we thought this campaign was a great way to actually rally the entire marketing industry and the advertising industry towards this next generation of marketing. the positive feedback that we have got is all testimony to the fact that we've taken up the mantle of really driving where digital marketing needs to be. >> finally, stocks up for the year. but it's obviously been stuck in this pretty stubborn range. what needs to happen in order for it to break above it? >> we think the two big

initiatives that we have, the move towards the creative cloud and enabling new subscribers to access that cloud and to continue to make sure it's the preferred way for all content creation, and continued growth in the digital marketing space, we think that that's a multibillion dollar opportunity. we think we need to continue to show success in both those initiatives. i think we're well on our way to doing that. >> appreciate your time today. congratulations on ringing the bell. adobe over at the nasdaq. >> thank you so much. it is tweet time. president obama on "the tonight show" with jay leno last night talking about test driving a chevy volt around the white house. we're asking you guys, what other products do you think the president has secretly tested? tweet us. we've got your responses next.

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squawk on the tweet on a thursday. the president sat down with jay leno last night revealing one of the quirks of being president. when he said he got to secretly test drive a chevy volt. >> wow. >> brings us this morning to our "squawk on the street" question. >> big giant perk. >> forget air force one. what other products to you think the president has secretly tested. gary writes i heard he tried out

donald trump's fact finding home kit. sylvia tweets, have you seen those lashes? he's been testing latisse. hey, held limelissa, the presid testing mattresses in case he needs something to fall back on. >> mary thompson had a great one she e-mailed to me. spanx. >> both candidates to their credit are in good shape. >> maybe because of the manx. you never know. >> what's coming up on fast? >> all over apple and amazon earnings tonight. ceo of gold corp. on the back of his earnings. and windows 8. what's at stake particularly when it comes to the stock? the stock hit 30, hasn't been able to cross it. what next for microsoft. >> you just come back from halfway around the world on vacation. you're basically running into the busiest two hours of

earnings of the week, probably -- >> she wouldn't miss apple earnings on the 5:00 show for nothing. >> my favorite story is you were in asia. you woke up and you saw google had reported. but you knew something was off. >> i had fallen asleep. i was jet lagged still. i heard jon fortt talking about google reporting earnings early. i was thinking it's the middle of the day. i started to listen. it's addictive. the markets are addictive. >> you've got to live it, you've got to love it. >> she is living it and loving it. >> see you tonight. we'll talk europe in about 30 minutes. if you're just joining us, here's what you missed earlier this morning. >> welcome to hour three of "squawk on the street." here's what's happening so far. >> the only way you solve this thing is with tax increases and spending cuts. you have to do both. anybody whoever says no, you can just grow your way out of this, just raise the top two brackets, just cut spending, baloney. >> we weren't going to let any branch of innovation go

uncovered. so with the microsoft surface, we ventured out to do an innovative new design for tablet, pc. >> i like the product that has not usually mattered with microsoft if the product's good. this new iteration, look, i think it's -- you don't buy the stock. you got to see whether it sells well. i'd love to be able to say, listen, this is going to sell well. it's microsoft. that no longer means it's going to sell well. >> listen to me. you happen to use this as cover. we know that. you're going to keep us trapped in this box. and our kids won't want to work for you. they're going to go where they use apple. opening bell rang on wall street here. >> we're here to give congress courage. we're here to say that if you do the right thing, there are all these ceos, all these companies who are important in their world who are going to be behind it. >> are you going to want to just continue buying apple products when they really are just changing the sizes?

you basically have an iphone, ipad and laptop today. is the ipad mini really going to cannibalize sales from the other products? my vote is probably actually more than we expect. good thursday morning. almost made it to friday. welcome to post 9 at the new york stock exchange. a check on the markets today. dow markets have been down four out of five sessions. a little repairing of the damage today with the dow up 31. nasdaq up almost four points at 1412. critical levels there. nasdaq up eight to 2989. gains from zynga, angie's list and symantec. all three stocks better than expected results. angie's list getting an upgrade to outperform at barrington research. best buy hitting a new one-year low if you can believe that. after announcing a management shakeup, issuing guidance saying third quarter results will be significantly below the level from a year ago. the road map today, microsoft unveiling windows 8.

reviews not all positive. will it give the company the boost it needs? we'll fipd out what balmer has to say about that. and about the new surface tablet. dunkin brewing up gains today after the third quarter. the ceo will join us for a first on cnbc interview. talk about earnings, sales and new stores. what the fed is doing that shows they're concerned about the fiscal cliff and the crisis in europe. iac/interactive recovering from confusion surrounding its third quarter thanks to a mistake by fact set. the ceo with us to set the record straight. we'll start with microsoft. windows 8 gets some mixed reviews as the company prepares to unveil the operating system today. jon fortt sat down with microsoft ceo steve balmer to talk about microsoft 8, the surface tablet and a lot more. >> i actually sat down with steve quite a while last week up at microsoft headquarters. the main occasion, of course, was the launch of windows 8.

here's a snapshot showing the importance of windows to microsoft. last year contributed just over 25% of microsoft's total revenue. a third of operating income, $12 billion. steve balmer is excited about it. here's what he had to say about the launch. >> one is a tablet. one pcs. you can have both, no compromises. windows 8 is for work and play. windows 8 is all about you. all about you. and windows is all about phones and your whole life experience. not just what you're doing on the big screen. >> it's about everything. the guy's excited. hey, this market has actually gotten awfully complicated. in q3 hp and lenovo were the biggest pc makers. dell shipped 9.5 million. apple, 17 million ipads alone. that's not even counting macs. that's before the cheaper ipad mini which people will be able

to preorder starting torl. that puts microsoft in a tight spot with windows 8. microsoft is not only building its own tablet, the surface, to set the pace for windows 8. it's also working with partners more closely than ever on designing testing. they're rolling out retail stores to try to define the consumer experience. microsoft is taking on quite a bit of risk to defend its turf in computing. after the holiday quarter we'll see whether it's paying off or not, carl. >> jon, i think those who say microsoft has lost its buzz, i mean, the stock is literally off one penny today. i mean, there's been no reaction. i wonder what you make of that? >> apple was down quite a bit when they announced the ipad mini. so hard to judge based on the launch reception exactly how these sorts of things are going to be received. but they've got a tough road. they're starting in the tablet market from behind. so i think they're aware of that. all of us certainly are. >> great access today, though, thanks to you, jon. thanks so much, jon fortt back

at headquarters. capital markets op-ed. gary kaminsky, a lot of good conversations coming out of that g sam event you were at yesterday. great stuff. >> that's a good thing. you'll never know where i'm going to be at this time of day. that's fun. listen, yesterday tremendous conversation. one word kept coming up when i saw former colleagues and great portfolio managers, hedge fund managers. attribution. the way it is used within the mutual fund industry is not the way it is defined. this is one of those words ha the mutual fund industry likes to throw out at you to try to confuse you, the viewer. why do i bring this up? we've talked for some time about the way this year worked. if you didn't own apple it was like being short apple because you essentially missed that relative performance. here's an amazing statistic. the people over at convergence do a great job putting the info together. take a look at the dow. look at what the dow has done

this year. relative contribution to the dow of five stocks. what's the point here? yeah, those five stocks creating 60% of the value. the fact is when you go and you go to an investment adviser, wealth adviser, consultant, what they're mostly going to tell you to do is basically own 100 stocks. that way you're creating some sort of risk management. that's a bunch of bs. i'm going to explain to you why. here it is. if you own 100 stocks and those stocks are in that portfolio and you think about doing the numbers, if you own those five stocks but you own another 95 stocks you're going to get the relative average performance. what's the point? i know from my work you don't ever want to own more than 30 securities in portfolio. that point was again hammered home so many times yesterday. because the ones -- the managers that have the great outsized performance this year have done it by being stock pickers. the closet indexers which we refer to so many times here who are charging you and ripping you off are not going to give you

above average performance. in a year like this you don't really care. to get s&p performance you feel good. over the cycle it is owning a few names. that is how you make money over the long term. i could not tell you, carl, how many times that point was driven home off camera yesterday. had to bring it back to the viewers today. >> that's really good. that list of names is unbelievable. anything that took you by surprise yesterday hanging out on west street? >> unfortunately couldn't share with you many of the attendees. that was sort of the rules. as i told you 11:30 yesterday -- greg smith and this whole idea about the clients and the clients facing the firm, it's such crap. i'm telling you, every institution is there because they want to deal with it. it's enough of this nonsense about the fact we've taken out a couple of bad things. the truth of the matter is the industry is doing a lot of good for a lot of people. that was brought home again all day yesterday. especially from the clients that were there. i was glad we got to see that firsthand. >> yeah. lloyd blankfein made some

headlines regarding that on our air as well. see you in a few. gold is having a standout day today. mary thompson is at the market flash desk. >> best day for gold stocks since september 13th. gold is a it willle bit higher. let's take a look at some of the stocks. one of the reasons they're higher are the gains we're seeing in canada's agnico eagle mines. the company recorded a quarterly profit, also raised production out put by 5% for the full year. it expects tote at cash costs per ounce to actually decline by year end. gives a lift to its stock and some of the other gold producers are following. back to you. >> okay. best day in four months in some cases. thanks so much, mary. get to the cme fwrgroup thi morning. rick santelli i imagine is watching gold, central banks, expectations of certain central banks in the days to come, rick? >> i think central banks when it comes to the bank of japan, it's definitely probably going to add more to their -- what's love got

to do with it is the theme of this segment. bob pisani in my opinion coined one of the best expressions of the year in regard to equities. the most hated rally of all time. the same could be said for treasuries. granted, if you look at where treasury yields were at the end of last year they were around 1 86, 187. the point is if you polled investors or even more importantly if you polled institutional fund managers in 2010, 2011, two weeks ago, what you'd find is every step along the way, they were bearish treasuries. whether yields were at 275, 250, 225, 2%. the only time they were slightly right, of course, was that small window where around 1.38 to

1.40, the all-time low closing yield. the point of this is i've said all along i don't believe investors are stupid. we all now know that flows haven't been in equities. they've been in bond funds. or have they? jim bianco, one of my favorite economists wrote a wonderful paper. i'll put one quote out. it's called everybody hates treasuries. the quote is we do not see a big interest rate bet being made by the public. we see tax plays, we see currency bets and big bets in corporate bonds. which can also be described as the low beta stock bet. what is he really saying? what he's saying is don't lump it all together. it isn't really an interest rate play. it's really a credit market play. and a lot of that, munis in particular, even with areas of california potentially illinois, around the country, these municipalities that are going chapter 11, it doesn't -- or chapter 9, it doesn't really matter. because it is still a play maybe against the fiscal cliff,

taxation. but the point is there is something we all agree on. but be careful. okay? if this is five years on stocks, i think what everybody's thinking about is between where we're at now and five years, they do believe stocks are going to be higher. but the real question is, where's the path to get there? and i think the same thing is true for interest rates. you know, here we are around 1.82. i think it's pretty smart to say that in a five-year horizon, pretty much everybody afwrees they're going to be higher. but what path are we going to take? that is really the argument. when you get many of these managers that say, don't worry, just buy and hold or buy on the dips, that all might be true. except for somewhere along the line there's going to be an extreme everybody's going to want to avoid. timing is nirvana. >> thanks so much. steve liesman is at the

buttonwood gathering in new york city. fresh insight on growth in this country on a day, steve, where j.p. morgan making adjustments to their own gdp figures. >> durable goods numbers were not as expected, leading to downgrades by about .2. i saw a bunch of economists, a lot of short-term concerns. really coloring the feeling here at this conference among economists and officials and former officials. the fiscal cliff, the u.s. election, the global slowdown, of course, europe. with a special concern about spain making that request for those special rescue funds. i did talk to former swiss national banker phil hildebrand who's currently vice chairman of blackrock. he's looking beyond short-term concerns. >> longer term particularly on the u.s., i feel the u.s. economy has turned a corner. there's some very good reasons to be very optimistic about the u.s. looking into 2013 and '14. >> reporter: former ecb governor said spain must have that

request for those funds. it cannot sustain its economy without it. carl? >> steve, thanks so much. a lot more from you later on today. when we come back, time to make the donuts. dunkin brand trading slightly positive after quadrupling its profit in the third quarter. up next, ceo will join us live for his first interview since releasing the results, nigel travis. the ceo of iac is here to defend misreporting of the company's earnings by a financial information website and the effect on that stock yesterday. back after a break. [ male announcer ] do you have the legal protection you need? at legalzoom, we've created a better place to turn for your legal matters. maybe you want to incorporate a business you'd like to start. or protect your family with a will or living trust. legalzoom makes it easy with step-by-step help when completing your personalized document -- or you can even access an attorney to guide you along. with an "a" rating from the better business bureau legalzoom helps you get personalized and affordable legal protection. in most states, a legal plan attorney is available with every personalized document to answer any questions. get started at legalzoom.com today. and now you're protected.

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dunkin profits, dunkin brands reporting third quarter earnings. dunkin donuts opened 78 new stores in the u.s. last quarter. the company also approved a quarterly dividend of 15 crepen raised its full year forecast. ceo, nigel travis, good to have you this morning. >> good to see you. >> i can see the spread in front of you. we can't be bought. just fyi. maybe we can be bought depending on how much you send. talk about the quarter. margins good. comps were good. areas -- it brings to mind or brings to question the number of new stores you have going forward. and is this a stage at which you put your foot on the gas? >> well, carl, we feel really great about the quarter. we executed in so many areas. obviously profits were very

good. our adjusted operating income up 12.5%. adjusted income up 44%. earnings per share 32%. i think the thing that really pleased me in the quarter was the fact that we really started to move as you suggested, we put the foot down on the accelerator on development. we nearly doubled our total number of stores globally in the quarter. we were up 36% on dunkin donuts new stores in the u.s. that's really the profit driver for the future. the more stores we get open, the more profits we're going to have in the future. our franchisees are excited. our margins are fantastic. we feel really good about the development story going forward. >> dunkin u.s. you're going to add between 280 and 300 net new restaurants. previous range was 260 to 280. when and where? and i guess the second question is, from who do you think you're

stealing share? is it a k cup issue, starbucks, mcdonald's? where is that growth coming from within the sector? >> well, they're going to come right across the country. we actually in the last quarter only opened 5% of our stores in the west. the rest of the year that's going to slowly increase. as we sign a new development agreement, it usually takes two years for that to come to opening stores. so you're going to see more and more stores in the west in the future. but, remember, we can still open 3,000 stores east of the mississippi. in terms of where the share is coming from, carl, it's coming from a number of areas. but i think principally it comes from the independent sector. and our industry is disproportionately bigger than many other parts of the qsr industry. sure, we're going to take some share from some of our very good other competitors. it's basically from the independents. >> obviously some of the -- i guess if there's any hair on the

release it might regard baskin and what's happened to dairy. can you walk us how through dean foods plays into all this? >> dean foods for many years has done a great job supplying the ice creme to our u.s. business. we then looked to their model a couple years ago and said it doesn't seem to be very sensible we're in manufacturing for international. why don't we think of changing that. we also saw our factory in canada was running out of capacity. so we said let's focus on our asset like model. let's get out of manufacturing. dean's been a fwragreat partner. let's move manufacturing to them. they don't manufacture all of international. it's about a third of international. we moved it to them. the closure of the plant was seamless. i think we executed that brilliantly. dean is going to do a great job going forward. our franchisees who are a little nervous about the ice cream coming from a new manufacturer, they think the product is

excellent. so we think this has been a really good move for us. and it actually improves our profitability going forward. >> yeah. we know franchisees get nervous about a lot of things. >> that's true. >> final question on k-cups. there seems to be in more fierce competition right now than that in the packaged goods, specifically k-cups between green mountain and starbucks. how has the evolution of that product changed your world? >> i think it has been revolutionary. i think there's no doubt that people at home are changing their habits. we do very well with our bag coffee business which is the beans, effectively. k-cups came in a years ago. there was a lot of concern on the street about how we were going to lap k-cups. in september which is the first full month we actually had 4.7% comps. and the comps are expanding as i sit here. we think we've got a model that really works. a, the only place to get dunkin donuts k-cups are in our dunkin

donut stores. plus 300 baskins in california. i have to make that point. as i go into grocers and some other retailers i look at the whole array of machines. i think consumers are going to be confused. we want to keep it simple. the keurig is a powerful, world tested machine. it's continued to grow. there's been a lot of discussion about green mountain. they're still growing at a very fast rate. that's good for us. we feel good about the k-cup business and our franchisees feel better about it. >> talk about being in a dynamic industry at a fascinating time. nigel, thank you so much for your time. send those over in front of you to this anchor december incomsk minutes. nigel travis joining us. when we come back, the two countries in europe that could give you and the markets a whopper of a headache in the coming months. a lot more "squawk on the street's" after the break.

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live from chicago, welcome

back to the third hour of "squawk on the street." i have one of my favorite worldly guests, mark grant, southwest securities. welcome, mark. i will tell you -- >> great to be with you. >> let's cover three topics. the first is the uk. on the uk side i have one simple question. is this jump in gdp basically going to last the extension of the olympics and economic activity or is it just a one off. >> i think it's a one off, rick. i think it had to do with the olympics and as you say a tremendous amount of people. i think britain did a fabulous job with the olympics, but i don't think it's going to last. >> second question, they say imitation is the greatest form of flattery. i never thought i'd live long enough to say france seems to be imitating the united states. they're going to continue to write checks to companies. they're continuing to guarantee banks. is this really the answer?

raising taxes, once again, similar to the arguments in the u.s., it seems to me europe's second largest economy has a problem. your thoughts? >> my thoughts are in exact agreement with yours. they have a huge problem. one, they're up to about 65, 70 billion in state guarantees. part of that is dexia. the actual number by the time the dexia derivatives and guarantees are dealt with could be around $350 billion to $400 billion in total which is going to have a severe impact on france. i think with that and with the fact that their economy is in decline, they've sided with the socialist nations against germany, that france is going to be in real trouble in the next two, three quarters. >> all right. last question obviously has to be about spain. you know, the head of their treasury told reuters i have 95% of my funding for the year. i read another story. it says what do we have? 17 autonomous regions in spain? many of them have funding

problems. where is the truth? >> the truth is that the ecb mollified the yields. but spain's regional debt is 50% the size of the nation. their banks are in big trouble. the bank stress test in my opinion validated nothing. they audited nothing. they just took the figures handed by spain. i think spain is in trouble that's going to be very similar to greece. and i mean serious trouble. >> mark, we have to leave it there. i don't have that warm, fuzzy feeling after talking to you. it seems, though, for the near term the markets seem to. carl, back to you. >> we'll see about that. thanks, rick. dow's gains are fading. we're about to get the bell in europe. we'll talk about the close there. and this gdp figure out of the uk when simon joins us in just a moment. in america today we're running out of a vital resource we need

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the european markets are closing now. >> dow had some impressive gains at the open, but we're now basically close to the flat line. we'll see if this close in europe, simon, has anything to do with that. >> yeah. it's been kind of all over the place in europe at the moment. i would again point out greece right down at the bottom. if you were looking for direction after the recent very, very strong gains on the greek stock market you can see we're slightly lower. i believe there were kwi chaotic scenes over the past 24 hours in athens. this time yesterday we were talking about how the greek finance minister was boasts

before parliament he got a two-year extension to the austerity program. he had to do a u-turn on that. real pushback from the germans saying you're not getting any money until the troika issues its report. probably the second week in november. the coalition over in germany suggesting, you know, if you get this extension, that's a 20 billion euro hole. the germans won't be signing off on that. that guy has had to do some fairly fast foot work. i mean, our belief is they will get the extension. it's just the shouting and where the bill is paid from. meantime spain is quite interesting. the people's party, ruling party over in spain, has filed an amendment in the committee to start tapping the credit line for the banks that we already know about. tapping up to $60 billion. they'll probably use $40 billion. the other big talk, of course, in the last 24 hours was the news from the treasury that they've raised now 95% of the cash they need for 2012. therefore they're now looking at raising cash for next year. bums wou

bulls would say that's great. ecb kept the yields town. bears would say, hang on a minute. haven't 8-- if they're able to sell bonds at this rate without going to the ecb and going to europe therefore triggers ecb buying isn't that a negative? i know yields are up today. we've ticked higher. broadly if you look at the month track we're kind of where we were last week. still crunching our way through earnings. let me mention some of those. no great direction overall from what we've learned today. unilever, consumer products company revenues above expectations. in chemicals, basf profits above expectations. bebenhams is a product store in the uk. on the downside there are some big names. you might not know upm-kymmene. paper products.

daimler. wpp downgrading expectations within his advertising. on a lighter note let me mention the uk. carl, this will take you back to the olympics. today we learned two pieces of information about the london olympics. the first is that they cost the government, uk government $14.3 billion to put on. the second, this is great, is that it actually ultimately appears to have lifted the uk out of recession. growth in the third quarter, we learned, was 1%. now, if the europeans reported their figures like the americans do, we would say that's 4%. it's an annualized rate of 4%. which is astounding growth. you're halfway to chinese growth there. the uk coming out of recession. actually, that quarter may mean they don't dip for 2012 overall. good news. >> the bigger story regarding europe is the way some big north american -- u.s. companies are

trimming their exposure there. closing plants. >> particularly in automotive. but that's -- there was far too much capacity for all those automotive makers from the french to the germans to the u.s. u.s. has had a problem with gm and ford for some time. now biting the bullet. the europeans are doing the same. >> yeah. >> look at porsche asked to be propped up by the french government. >> santelli referenced it today. another capital markets op-ed. the next insider trading trial about to begin, gary. >> i don't know if you're aware of this. most people are a little surprised to know there's a massive trial that's about to begin on monday, the 29th. this involves anthony chase and global advisers. this is about all of the insider trading. something like $60 million of illegal profits in terms of kips and things being passed on between hedge funds pap lot of people are focused on this. i know we spend a lot of times talking about politics and apple. believe it. in the industry nothing is more

concerning than what happens with insider trading. talk about shaking retail investor confidence. yes, flash crashes do it. yes, companies reporting earnings in the middle of the day when they're supposed to report after the close. but insider trading gets to the heart of it all. in the sense of if you can't trust the data you're getting because somebody's trading against you every time you buy and sell, who's going to trust the system? again, big trial on monday. everybody in the industry paying attention to it. which leads me to the sentencing that came out yesterday for one that was a pretty black and white, cut and dried case of insider trading. government did a great job in terms of going after rajat gupta. it doesn't get cleaner than walking out of a board meeting and basically calling somebody and telling them what you heard in the board meeting. doesn't get more difficult than that. great job by the government here. we knocked out a lot. they did an excellent job here. many of you felt like i did when you saw the sentencing. basically two years in a club fed open in otisville, new york. what does that send the message? i've been told by a number of

people, he did not do this with any kind of money intention here. again, that's not necessarily the point. i know many of you were frustrated. what i hear is this was much more about the judge call. this judge was a former defense attorney. and he may have been given a two year sentence, essentially trying to stick it to the government saying he thought they did a bad job here. there's a lot of politics that come in when you get to the sentencing. remember, the big trial, starting next week. >> it's a great statement. basically decision. people should read it. fascinating day. thanks, gary. change in the board room over in gredreamworks. >> roger enriqhu as has resigned. no reason given. replaced by melanie hobson. dreamworks has pulled back on that news coming off the lows of the session. nevertheless, down fractionally right now.

roger enriquo resigning, replaced by mellody hobson. bob pisani is here at post 9. when did we lose the mojo from this morning? >> it's about 10:00. pending home sales -- remember, new home sales were just great. housing starts were just fwraet. i think some people were really hoping they'd get a blowout number on the pending home sales numbers. it didn't really happen. we kind of started losing momentum right after 10:00. then we just sort of moved to the downside here. there have been rumors floating around that fitch might come out with a sfamt on its debt rating or outlook. we called fitch because that's what we do. we're journalists. fitch referred us to a statement that goes back to july 10th. fitch does not expect to resolve the negative outlook until late 2013. okay? we got a lot of calls on this. there's the fitch statement. black and white so everybody can rest clear on that. let's move on, talk about some more important things here like the housing numbers. a little bit of disappointment.

as we were fwoigoing into the pending home sales numbers, here's the home builders. just before numbers came out people were selling into it. i think that's sort of what topped out the market. the numbers this morning, excellent numbers overall. again, you want to look at home builders, the most important metric is new orders. it's the thing i always fwo for. ryland's number, 55%. that's a fantastic number. pulte, 27th. look at the home builders. ryland up nicely. pulte down a little bit. again, i think they want a little more order growth. horton and k.d. home to the downside. let's talk about where we are in the earnings outlook for the third and fourth quarter. we get down to the idea it's still about revenues coming down. look here for the third quarter how the numbers have come down. these are revenue estimates for

the s&p 500. in april it was supposed to be up 5.5%. by july 10, 5.3%. tend of august, beginning of september it started coming down begin. 2%. october 2nd. now 1.3%. as we've got numbers coming down the last few days we've seen the market come down. it's the revenue downside that's surprising the market. not the earnings. we've basically been to the flat side. take a look so far. 41% beating on revenues. way below historic average of 61%. this is the market surprise and why we've been weaker. before we close look at the s&p 500. i want to show you these numbers. we were down here a couple of months ago. the market hopped up rather dramatically in the last few months. here, look, september, early part of september, there is the ecb and mr. draghi talking about bond buying. here is the fed coming out and talking about qe-3. does the fed and ecb affect the stock market? can anybody read here? there you see. carl, the important thing is

we're right back where we were before the ecb and before the fed started making some comments. the question is does the fed and ecb affect the stock market? they do certainly have an influence. they're certainly a little higher. we're right back down now as those revenue numbers have come cowan. >> this rumor fitch was going to down raid the u.s., reuters contacted the u.s. ratings agency. they said we're sticking by our time line, late 2013. but the rumor lingers. >> that's why you call the company. pretty plain to me, they're into 2013 before they review down. >> dow down 22. kudlow caucus coming to post 9 again. larry kudlow is here. we'll talkle all thipgs fed and the economy. iac/interactive reeling from confusion about the third quarter. ceo will be with us live to set the record straight once and for all when we come back.

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next on the halftime report, an all-out tech war. apple or amazon? which is the better buy now. traders make the call ahead of earnings. a make or break moment for microsoft. is windows 8 dominant enough to start the stock? ice canyon's nathan sandler delivered alpha in july. he's back with the best place in the world to invest right now. all at the top of the hour. carl? >> see you soon, michelle. kevin war sh was on "the kudlow report" last night. the man some say is on the short list to become the next federal

reserve chairman. larry asked kevin about the fed's policies and implications on the fiscal cliff. >> i think they revealed in their actions six weeks ago how gravely concerned they are about the economy. how concerned they are about its prospects, how concerned they are about the fiscal cliff and europe. >> larry is here with us on post 9. welcome back. good to have you. >> thank you. >> you have a broader point to make about how the relationship between the next president and the fed will go. >> right. i've heard a lot of rumors that people think romney is going to try to push bernanke around. raise rates. not only did warsh say this last night, i made some phone calls to the romney people. there's not going to be a romney fed confrontation. nada. not going to happen. don't even think about it. anyway, the romney people would not be unhappy with a zero interest rate for their first year, right, so they could help get the economy jump started maybe with some better tax and regulation policy. anyway, they couldn't move bernanke because he's stubborn. and, anyway, the federal reserve board is stacked with easy money

obama appointees. so it would be like knocking up against -- it's not romney's style. he's just not going to do that. on the other hand, i think warsh is right. the fed is still worried about the economy. look at the numbers this morning on capital goods and durable goods. take out defense and take out aircraft. these were lousy numbers. businesses not investing. there's no capital goods activity. >> we had a bunch of ceos ring the bell today from fix the debt. >> yes. >> proposing what judd gregg today called a simpson/bowles plus type template. does that impress you? is that going to get us anywhere? >> depends what it is. i'm a tax reformer, not a tax hiker. so i want to see lower rates and a broader base. put caps on the deduction. i'd like to see some spending cuts. does anybody want spending cuts? does anybody ever want spending cuts? i would like some spending cuts. i think if you had something that took away the tax hikes but had some kind of long range

deficit reduction plan including spending cuts, that would bolster the animal spirits of the economy, would make businesses more confident, would help the stock market. look, housing's okay. it's getting a little better. consumers, okay. business is your problem. business investment and hiring. some of these companies reported they're laying off again. they're closing down production. >> a lot of that, though, is bringing that capacity out of europe, right? >> europe's a big problem. i first heard this from the ceo of dow chemical when i interviewed him. he has shuttered plants in europe. a lot of these guys are. europe is a major problem. i think in some sense it's much tougher than u.s. tax policy. but, look, it's a 2% economy. that's all i'll say. it's not the end of the world. we're having a market correction. things come and go. but we got to clear up some of this uncertainty, there's no two ways about that. >> speaking of which tonight you have lee kuperman who's done arguably more than anyone on the street to raise visibility about what government -- how they need to change.

>> i think so. i think lee has been a very prominent supporter of romney's reforms, tax reform, spending reform. he's not a big fan of president obama. we'll talk about that this evening. but lee coupkuperman is also a brilliant investor. how do you get from here through the next 13 days and then into the lame duck congress? these are very delicate investment themes. i want to hear what lee has to say. >> infinite number of investors want to hear his answer tonight. be sure to catch more of larry on "the kudlow report" every weeknight 7:00 p.m. eastern right here on cnbc. ceo of iac/interactive is going to join us next surrounding confusion of the company's successful third quarter and the mistakenly reported number yesterday when "squawk on the street" comes back. >

. iac currently trading higher by more than 5%. the trading was halted yesterday after what appeared to be a misinterpretation of the company's 2013 guidance by fact set research. greg blatt is the ceo of iac. he joins us for an exclusive interview along with julia boorstin in los angeles. good morning to you. >> good morning. >> it was about 24 hours i was in this very chair when we noticed the stock was halted. a lot of confusion because we didn't quickly understand why. for those who haven't paid extremely close attention can you explain what happened yesterday? >> yeah, sure. we released our earnings before market. we had great earnings. i think revenue was up 38%. profit up 44% year over year. the stock initially went up. as we settled in for our earnings call, we saw our stock dropping. didn't really know what was going on. as we were answering analysts' calls, one of the analysts actually mentioned that we had done a filing earlier, a

required sec filing reconciling a profit metric gap to nongap on -- on one of our segments. and fact set, a financial firm, had misinterpreted that as our guidance for the entire company. i guess the market reacted pretty negatively to that. the stock dropped. nasdaq halted. ultimately it was clarified. the stock has rebounded some. certainly not back up to the levels it was prior to that. >> i think that's probably what's concerning to some. the stock even with the mistake cleared up closes down more than 8% yesterday. we're looking at a prior day chart. you can see exactly where the pain came. not that it's the same situation, greg, but last week google's earnings release gets let go early by r.r. donnelly. do companies need to change the way they disseminate information? >> look, from what i know of the google situation, you know, donnelly made a mistake.

they don't make them often. i'm not sure that there's a lesson to be learned there. i think with us, you know, again, i think maybe we could have gotten it out earlier or done something like that. in general i think mistakes do happen. they happen rarely and you try and avoid them. it can happen no matter how you do it. >> julia? >> greg, sticking into these numbers themselves, analysts seem to be questioning the sustainability of parts of the search business. the search tool bar business in particular. how do you address questions about whether or not you're going to be able to maintain that growth? >> look, i mean, the growth has been phenomenal for many years. it's a business that's driven by new product development and new partner relationships. we continue to develop those. there's no shortage of product ideas and marketing opportunities. so i think, you know, there's always been some lack of understanding of that business. but it's pretty basic. we develop small products. we distribute them over the web

very profitably. we don't see growth slowing meaningfully in the future. >> now, this earnings season we've seen a huge impact of consumer shift to mobile devices. you said on the earnings call that mobile monoteization is lagging montization on the desktop. what are you doing to address that? >> i think if you look across our businesses, it really varies. in our dating businesses almost 50% of our usership on dating sites are happening on mobile now. where it's subscription based, monoteization is fun. advertising based it runs at a deficit against its desktop counterparts. you hope you make it up in paid views. overtime the advertising gets better on the mobile form factor. new forms of advertising come up. we think that will happen. on search, very similar. i think, you know, search queries are probably monetizing three or four to one better on desks than they are on mobile.

you hope you make it up in volume. i'm sure the monetization will get better over time. i think it will come. i think if you look at the history of internet advertising it took a while to get to where it is. i think the same will happen here. >> now, i want to address, you mentioned your dating businesses. the match businesses. it's one of your biggest single businesses. it is growing. but the growth is slowing. is the business hitting saturation. is it because people are meeting other people on facebook? what's the future of this business? >> no. i think, look, the future of this business is very bright. we have over -- we have approximately a million people sign up for our sites every week. we monetize a very small portion of those. there's no demand issue. i think we can get better at offering products and services that people kopt to pay for. i think you've got a global business. in terms of saturation, we're nowhere near it in the united states. we're nowhere even row motely near it globally.

e think there's tons and tons of opportunity there. i think our quarter had a few converging things. we bought a business in europe that's in the midst of a turnaround. it's going very well, but that's a drag on sort of the overall revenue number. we also have a segment called developing where you have a number of runoff businesses coming down. those are going to reverse themselves in 2013. our core subscription businesses are going to grow meaningfully next year. we feel really good about the outlook on that business. >> greg, as diller said on the call, starting right now it's a buying opportunity. there's always that bright side. appreciate your time today, greg. thanks for coming on. >> all right. talk to you later. >> julia, thanks to you as well. keep those tweets coming, by the way. the president revealing to jay leno one of the perks of being the president, secretly driving test cars on white house property. in this case a chevy volt. going around the grounds. we want to know what other products do you think the president has secretly tested? tweet us @squawkstreet. we'll get some of your answers

next.

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let's build a strong foundation. let's invest in our teachers so they can inspire our students. let's solve this. tweet time. the president revealing the perks of being president to jay leno when he said he secretly got to test drive a chevy volt. what other products has he secretly tested? andre rights